Ethereum Merge Set to Make Cryptocurrency Greener

A huge change is about to be underway for the second most widely circulated cryptocurrency that could significantly reduce the amount of energy it uses.

In a move that has been dubbed “The Merge,” Ethereum is set to change the way it validates its transactions from a “proof-of-work” system to a “proof-of-stake” system, which, according to Ethereum team, will reduce power consumption by 99.95%.

Currently, the amount of energy used by Ethereum is around 112 terawatt hours per year. To put that into perspective, that’s more electricity than the entire country of Pakistan uses in a year.

Here is how the cryptocurrency plans to go green:


Cryptocurrencies like Ethereum are all decentralized, meaning the ledger, or records of transactions, are stored on multiple computers in a network.

Currently, Ethereum relies on a proof-of-work system to validate transactions and update the ledger. This means that each transaction requires advanced computers to solve an extremely complex mathematical equation in order to add it to the ledger, in a process called “mining”.

When a new transaction arrives, all the computers on the network try to solve the mathematical equation, and the computer that solves it first is rewarded with currency as payment.

But this has prompted Ethereum “miners” to invest in a lot of more powerful and energy-intensive hardware to give them a better chance of making money from mining.

Miners also pool their hardware in so-called “mining pools”. Just as a desktop lottery pool can give you a higher chance of winning the grand prize, mining pools work on the same principle, dividing their profits among their members.

But just three mining pools account for more than half of the Ethereum network’s computing power, raising fears that the cryptocurrency is becoming too centralized. If a single mining pool were to take control of more than 50% of the computing power on the network, it could effectively take control of the currency and have the ability to approve bogus transactions. This is called “the 51% attack”.


Cryptocurrencies like Ethereum have come under fire from environmentalists, who point to high levels of energy consumption. But after the merger, Ethereum will transition to a proof-of-stake system, which is expected to use only 0.05% of the energy the cryptocurrency currently uses.

The current system relies on millions of powerful computers trying to solve the same mathematical equations at the same time, and proponents of proof-of-stake say that’s a huge waste of energy.

In a proof-of-stake system, a single computer is selected to validate the transaction. In order to participate as a validator, a user must deposit or “stake” 32 ETH. If the transaction is successfully validated, the validator will receive the transaction fee as a reward.

Although it may seem more risky to rely on a single validator, the system comes with safeguards. Validations are checked by other computers on the network, and if a validator approves a fraudulent transaction, the validator loses part of their stake.

Theoretically, a 51% attack could still occur if an entity buys more than half of the Ethereum supply, but this is highly impractical as it would cost close to $100 billion.

The merger is expected to take effect around 1 a.m. EDT early Thursday morning. It is unclear what long-term effect the merger might have on the price of Ethereum. On Wednesday evening, the cryptocurrency was up around 4.00% since the start of the day.